Sure, these tools will give consumers pricing power—ditching a vendor for a homegrown solution is more feasible now than it was a year ago. But that has its own cost. If you make it, you have to maintain it, and who wants to do that? You’d rather have your employees focus on what actually generates revenue than build a second-rate calendar app you could’ve paid a few bucks for.

You pay for software to offload certain kinds of thinking to other teams. That’s always been the deal.

Every minute spent tweaking a boutique, internal project management system is time taken from perfecting the ad engine that pays the bills. The build cost went down. The opportunity cost barely moved.

So the vibe-coding-kills-SaaS panic feels overblown, but there’s another version of this story that’s harder to dismiss.

The fear isn’t that your customers replace you with a weekend project. It’s that the model companies eat the application layer entirely—that something like ChatGPT becomes the interface through which we do everything.

The model companies raised such enormous sums it was always obvious they’d come for this layer eventually. There’s a huge wave of applications building on top of these models, each claiming some trick, some moat that will keep it relevant, keep Claude from stealing their lunch. But does any of that plumbing actually matter? Richard Sutton’s “bitter lesson” suggests not. He posits that at lower levels of intelligence, you need orchestration—domain-specific tricks—to get the right output, but you can obviate all of that by just having more intelligence. The scoreboard so far suggests he’s right. If he is, then everything built on top of the models becomes an increasingly thin layer. Why bother with a legal tech startup when a smarter Claude can handle contracts?

Aaron Levie, CEO of Box, makes the counterargument well: people love tools specific to their needs—a team that eats and sleeps your particular problem. That feels right to me. These companies should always have a place, but their position is unenviable. They’ve built castles on land they don’t own. The model companies can always beat them on price per token. And what if they start keeping the best models for themselves? Who survives the next leap in intelligence?

Every unlock of clever engineering is table stakes in the next model release, so the moat can’t be plumbing. It has to be something else. If you can’t name it, you don’t have it.

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